FxWirePro: USD/JPY edges lower from fresh 3-month highs above 114 handle, geopolitical tensions cap upside

• USD/JPY hit fresh 3-month highs at 114.10 early on Monday, extending previous week's gains.
   
• Yen selling gathered pace following Japanese Prime Minister Shinzo Abe's ruling party victory in Sunday's snap election.
   
• Also, USD is extending rally after US Senate passed the budget plan, paving the way for Trump’s tax reform plan last week.
   
• Upbeat housing data which showed US existing home sales rose 0.7% in September to an annual rate of 5.39 million above the 5.30 expected also kept the USD supported.
   
• That said, rising escalation of tensions between US, North Korea and Russia could keep upside limited.
   
• Technical bias remains higher. The pair has broken major trendline resistance at 113.20 raising scope for further upside.
   
• Weekly 200-SMA is strong support at 111.89, we see weakness only on close below.
   
• On the upside, next target for bulls lies at 114.50 (July 2017 highs) ahead of 115.51 (61.8% Fib retrace of 125.85 to 98.78 fall).

Recommendation: Good to go long on close above 114, SL: 113, TP: 114.50/ 115/ 115.50

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